Company Environment and Corporate Social Responsibility

Posted on Feb 18, 2025 in Economy

Strategic Company Environment and Responsibility

3.1 The Company and Its Environment

The environment affecting firms can be divided into two categories:

  1. General Environment (Social): Affects all firms in a given society.
  2. Specific Environment (Particular): Affects each specific company more directly.

General Environmental Characteristics:

  • Culture
  • Technological
  • Policies
  • Legal
  • Natural Resources
  • Demographic
  • Sociological
  • Economics
  • Education

Specific Environmental Characteristics:

  1. Customers:
    • Distributors of the product.
    • Current users of the products.
  2. Suppliers:
    • Suppliers of raw materials.
    • Suppliers of goods.
    • Providers of other components and services.
  3. Potential Competitors:
    • Workers (competitors against customers).
    • Competitors to suppliers.
  4. Substitute Products: Alternative options.
  5. Sociopolitical Component
  6. Technological Component
  7. Sectoral Regulations

Economic Factors Affecting the Company

I. Permanent Economic Factors
  • General level of economic activity.
  • Degree of economic development in the region where the business is located.
  • Rate of population growth.
  • The degree of industrialization.
  • Levels of wages.
  • Distribution of wealth.
  • Availability of local raw materials and capital.
II. Temporary Factors at the National Level
  • Level of economic activity.
  • Status of the balance of payments.
  • Interest rates.
III. Temporal Factors of International Order
  • Level of global economic activity.
  • Competition between companies.
  • Other factors.

Other Elements: Social and Technological Framework

Collective agreements are agreements between an established global company (or group of companies) and the unions representing the workers, which establishes the conditions governing the employment relationship within the company:

  • Salaries and wages.
  • Working day or week.
  • Overtime: calculation and payment.
  • Rest and interruptions in the day.
  • Hygiene and safety at work.
  • Vacation and holiday pay, absenteeism levels, when they have to take vacation.
  • Procedures for selecting and promoting employees.
  • Standards of production and rhythms.
  • Age of retirement.
  • Changes jobs and transfers.
  • Use of casual labor.
  • Social benefits such as family support, awards of birth and marriage, retirement allowances, study aids for children, internal company training, housing loans, etc.
  • Regulation of the strike and lockout.
  • Duration and renewal of the agreement.

3.2 Corporate Social Responsibility

A company is responsible for problems such as air pollution and water pollution, land speculation, urban and industrial concentration, and so on.

A company can use preventive mechanisms for pollution (cost of environmental pollution) or transfer responsibility to the community (social costs = costs associated with the activities of an economic subject-company-that are supported by society as a whole).

The increased economic and social development requires a conjunction between business profit and human and social welfare.

What Does Corporate Social Responsibility Encompass?

  • Accountability
  • Environmental stewardship
  • Public Service
  • Consumer rights
  • Culture, arts, and entertainment
  • Business Ethics
  • Relations with workers
  • Social integration
  • Development